Can someone please help me understand these basic accounting workflows?

Trying to figure out the proper workflow for recording expenses/sales/donations for our small nonprofit. This is my fourth time redoing our books for 2020, because I keep recording it wrong and hoping someone here can shed some light.

Here are the tasks we’re trying to do:

  1. Record donations:
  • The donation info ( receipt number, date, amount, what bank account it entered, date, a donation ‘type’ (unrestricted, membership, etc ).
  • link to a donor so we can see their donations.
  1. Record sales - these are for services, there is no inventory.
  • The sales info (receipt number, date, amount, what account it entered, what was purchased (no inventory).
  • Link to project (so we can see the income/expenses/budget)
  1. Record expense invoices - we rarely get these, but when we do:
  • the expense info (amount, supplier, invoice number, date received, due date, what it’s for [description, no line item list or inventory management).
  • Link to project (so we can see the income/expenses/budget)
  • PDF of the invoice.
  • need to be able to mark them when they’re paid (which account, date, receipt #).
  1. Record general expenses (most of our work)
  • the expense info (amount, supplier, receipt number, date, what it’s for [description, not line item list or inventory management]
  • Link to the project (so we can see the income/expense/budget).
    -*** sometimes these expenses are paid out of pocket by volunteers, and we reimburse them. Need to be able to track who fronted the expense, and if it’s been reimbursed.

All said and done, we need to be able access the info.

  • reflected the P&L and other financial reports.
  • detailed transaction info in the relevant accounts.
  • a filterable list of all expenses/sales/donations, by supplier|donor|project|volunteer who fronted the expenses.
  • reflected in the Budget management tools.

This may seem basic to straightforward, but the last three times I must have done something wrong, because other screens were always missing/breaking something (ledger, income account history, P&L statement, etc).

:pray::pray::pray:

Do you have an understanding of why things are going wrong? Everything you’ve listed above is standard fare for Sales Invoice/Purchase Invoice doctypes, with the possible exception of (1). Your description in (4) makes me think that you might not be following standard accounting practices. Is it possible that the problems you’re having are more related to that than to workflows?

I’m not trying to ignore your questions, but I want to make sure I understand the situation correctly.

Thanks for the quick reply! I’m not an accountant, but ive been handling the nonprofit bookkeeping on 5 years. Coming from quickbooks, where the flow (and the naming of tasks) were quite different.

My first attempt was trying to use journal entries (added a link to Project doctype), but the transactions werent showing in either the cost center or the P&L report, and missing in the General Ledger.
Then I attempted to use the Sales Invoice for income (both donations and event ticket sales), but I couldnt figure out how to add a receipt number, or split the items into different income accounts/projects `(e.g. if in the same purchase, someone bought tickets to 2 different events and donated ). Ditto with Purchase Invoices (e.g. buying food for multiple events), no way to split items with different expense accounts. Thought I could use Expense claim for fronted expenses by volunteers, but the expenses there didnt show up in the P&L, probably because I couldnt associate it with the right types…

And at that point I realized that for my fourth time, I should check with the community what the idea flows are, instead of trying and failing to recreate the flow Im used to from QB.

My assumption is that even if I stumbled onto the correct form, I’ve been using them wrong. Hoping for something a bit more step-by-step.

I think it might be worth taking this one step at a time. There’s quite a bit that I don’t understand here.

For starters, something’s not right with what you’re describing about Journal Entries. Journal Entries should always write to the General Ledger. My initial hunch (based on nothing) would be that you have incorrect filters applied to GL, P&L, and Cost Center reports. Are you sure, for example, that you have the right company selected?

If the journal entry isn’t writing to the ledger, it’s possible that something is corrupted on your installation. Can you create a Journal Entry and then share a screenshot of your General Ledger Report?

So you seem to be right. While the project field didnt work the first time (v12.17), on this new install (v13.3) that seems to be working correctly! Thanks!

That should be enough for handling 1 & 2 income (sales and donations - although at some point I’d like to figure out how to use Donations and add a receipt # to the Payment Entry).

Now for Expenses - 3 & 4.

  • 3 is the normal find a supplier -> they send you an invoice for their services -> you pay -> they send you a receipt flow.
  • 4 is different. Usually its we receive a budget -> pay for the service (either directly from our account, or by a volunteer) -> reimburse the volunteer.
    So for the purchase I need to record: the amount, supplier [linked], receipt #, date paid, project [linked], the expense accounts [linked], an attachement to the scanned receipt, and sometimes the volunteer who fronted the money [linked].

You are either in “discovery (knowing how to do things correctly” or “debugging (identifying errors and showing where things go wrong)” modes.

May I suggest that instead of entering all data at once, you may enter one data at a time and check the relevant reports. This way you can pinpoint exactly what transaction(s) causes the error.

This will also help coders who contribute code to ERPNext to correct the bugs that can identified.

It will also help if you can show screenshots. because, as you mentioned, you are not an accountant. ERPNext may be right and you may be wrong (just speculating the possibility).

Right now, lets say im in discovery mode, and just looking for help understanding the expenses flow :slight_smile: If I try anything else, Ill be sure to share a screenshot.

I’d suggest looking into the Sales Invoice/Sales Order doctypes as well, as they abstract many of the technicalities preset in Journal Entries. The Journal Entry is a very versatile doctype, but as such it is generally used as an “elsewhere case”, offering a way to write to the General Ledger for things that don’t fit other, more specific doctypes.

For Receipt number, if all you want to do is have a field to enter a receipt number generated by an external system (such as paper), you can just use the “Customize Doctype” option to create a new custom field. Then, you can put whatever you want in there. Conversely, if you want ERPNext to be the authoritative source for receipts, you can use a naming series to have ERPNext generate receipt numbers automatically. Happy to expand on any of this, of course, but this might get you started.

This is exactly what the Purchase Order/Purchase Invoice flow is for. If you haven’t played with it, I’d suggest checking it out. Let us know if you hit any difficulties. If your employees are fronting these costs for later reimbursement, there are a few things to think through, but those questions have as much to do with accounting as they do with ERPNext.

Are you using purely the Journal Entry alone?

I may missed something from your question.
But recording donation as Sales is not correct, right? (I’m also not an accountant)

Are using the Non-Profit domain? I think there is donation recording form to record donation.

EDIT:
My bad…
I just see the Non Profit domain. There is Donor doctype but I don’t see the donation doctype.
This is confusing because most Non Profit is taking donation instead of selling products.
But there is Loan and Grant doctype.
So I think it should be cleared by the domain creator to describe what kind of non-profit is the domain aimed at.

Some jurisdictions have very specific ideas about the paper trail for donations, but in others they’re treated essentially the same as sales. OP would probably want to keep separate income accounts for donations and services, but I don’t see any reason that the Sales Invoice doctype shouldn’t be used for recording transactions.

There’s a donation doctype too (new in v13 I believe). Using that would be tidier in some ways, but it’s not nearly as sophisticated in its functionality as the sales invoice is. In the end, it all just depends on need.

Hey…
sorry for jumping to an old thread, i have a couple of NGO related queries, maybe there is a bug

I am trying to enter this “new donation” but shouldn’t this be the end of it? this entry should show up in the bank account as well as in donations in income and expenditure account so why do i have to multiple entries after this entry?
a few more but lets start with this, if anyone is willing to help